Correlation Between Progressive Corp and Chubb
Can any of the company-specific risk be diversified away by investing in both Progressive Corp and Chubb at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Progressive Corp and Chubb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Corp and Chubb, you can compare the effects of market volatilities on Progressive Corp and Chubb and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Progressive Corp with a short position of Chubb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Corp and Chubb.
Diversification Opportunities for Progressive Corp and Chubb
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Progressive and Chubb is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Corp and Chubb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chubb and Progressive Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Progressive Corp are associated (or correlated) with Chubb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chubb has no effect on the direction of Progressive Corp i.e., Progressive Corp and Chubb go up and down completely randomly.
Pair Corralation between Progressive Corp and Chubb
Considering the 90-day investment horizon Progressive Corp is expected to generate 1.28 times more return on investment than Chubb. However, Progressive Corp is 1.28 times more volatile than Chubb. It trades about 0.17 of its potential returns per unit of risk. Chubb is currently generating about -0.12 per unit of risk. If you would invest 20,592 in Progressive Corp on January 24, 2024 and sell it today you would earn a total of 810.00 from holding Progressive Corp or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progressive Corp vs. Chubb
Performance |
| Timeline |
| Progressive Corp |
| Chubb |
Progressive Corp and Chubb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive Corp and Chubb
The main advantage of trading using opposite Progressive Corp and Chubb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Corp position performs unexpectedly, Chubb can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chubb will offset losses from the drop in Chubb's long position.| Progressive Corp vs. Aquagold International | Progressive Corp vs. Thrivent High Yield | Progressive Corp vs. Morningstar Unconstrained Allocation | Progressive Corp vs. Via Renewables |
| Chubb vs. Aquagold International | Chubb vs. Thrivent High Yield | Chubb vs. Morningstar Unconstrained Allocation | Chubb vs. Via Renewables |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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